Russia, As Seen From Silicon Valley

Here’s a provocative essay by Max Skibinsky, a Russian emigre who is now a Silicon Valley venture capitalist. A Russian friend passed it on to me, and said Skibinsky nails how it is in Russia today. I know this blog has some Russian readers, and readers knowledgeable about Russia, so I request their feedback.

Here’s how Skibinsky begins:

Many people in Silicon Valley inquired over the years why I was not coming back to Russia often (I visited once in two decades) or why I’m not spending much time helping Russian startups. I usually answered these questions in generalities while keeping my grim thoughts and predictions to myself. The events of the past few days, unfortunately, show that the worst predictions I feared all these years did come true. The nightmare scenario is now unfolding as we speak, and Russia position in the world is now altered forever.

Well, “forever” is a very long time. Anyway, Skibinsky says that modern Russia is a corrupt oligarchy in which the great masses of people are misled by state propaganda, and supported by oil revenues:

Modern Russia is not a weaker version of Soviet Union “empire of evil.” This capability is, thankfully, long gone. Russia is “cargo cult” of Soviet empire. It lacks competent professionals, leaders and minimal work ethics to accomplish anything on that scale. It just have enough capacity to cover everything in a blanket of lies, and as long as it works on captive domestic population that is all that it’s leaders need to keep channeling profits from Russia to London accounts.

The best way to understand modern Russia is to imagine a steep pyramid. At the very top there is a clique of KGB-affiliated oligarchs, who manage barely-competent class of middle-managers (which can and do steal a fraction of everything they touch) which in turn sit on top of largely brainwashed and deranged mass population living on life-long government welfare.

Needless to say this is most toxic environment imaginable to incubate a startup ecosystem.

He goes on to say that Russia’s political, legal, and social situation conspire to drive out the kind of people who could revitalize its economy:

Creative class was a minority in modern day Russia and there is a strong emergent behaviour that draining their numbers. That is a class of people with the skills most in demand in Europe and USA. During “peaceful” decade of Putin’s rule over two million people emigrated from Russia: this is a number higher then immigration after communist revolution and civil war.

By my estimate there is probably few hundreds of thousands of people in the creative class in Russia. This vocal, yet very small group so far never succeeded at thwarting russian mafia state at anything.

Skibinsky concludes that Silicon Valley ought to be doing everything it can to support Ukraine and to disassociate itself from Russia, from which, he says, “there is nothing of value to recover.”

What do you think? Do not assume that by posting this, I agree with him. Perhaps if I knew more about the situation, I would agree with him. Or not. I can say that of the handful of Russians I know, mostly emigres but also a Russian Orthodox academic in Moscow, and none of them liberals in the American sense, this fairly represents their position on prospects in their homeland, if not necessarily their position on the Ukraine-Russia fight (thought it might; I’m not sure).

What’s interesting to me about this is what it says about prospects for Russia, or any nation whose creative minority believes it cannot thrive in that country. I’ve been thinking a lot about exile lately, not only because of Dante, but because of a side project I’m working on. Few people go willingly into exile. Many are sent, but many also send themselves, as the lesser evil. At what point do things get so bad in a country that people who do not have to leave, either because they’re thrown out of fear for their lives, decide that they and their children have no meaningful future there, and so must become strangers in a strange land.

(Oh, earlier today an old (Catholic) friend wrote from Paris to say that with the latest spasm of Islamic anti-Semitic violence, he’s never been so downcast about the future of his country. So things are bad all over.)

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61 Responses to Russia, As Seen From Silicon Valley

What an entertaining potpourri of comments, wise, foolish, and incoherent! I know little of Russian or Russians beyond War and Peace, the other classics, and the immigrants at our Albuquerque OCA parish, but all of it prompts 2 comments:

1. Someone (I think wisely) remarked that Russians are the most pious people in the world;

2. “Dost thou not know, my son, with how little wisdom (prudentia) the world is governed?”

I used to work 3 years in South California as Project Manager in successful IT start up. I’m 37, I’ve 15 years exp in IT and MS in Physics. So, I’m definitely a guy about whom Max wrote in his post. But I’ve opposite opinion. __He doesn’t know what he is talking about__. I returned back to Russia and I live here. I visited Kiev in January’14, I visited Olympic Games. Max is wrong. He left Russia 20 years ago, and it’s hard to imagine what progress Russia did in last 20 years. I had a talk with woman during flight LA-Moscow in 2009. She left Russia 25 years ago. She asked me is it possible to find ATM in Moscow to take cache from her Visa card and is it possible to buy a food in a shops. She remembers “PERESTROYKA” and she remembers how hard it was to live at that time. It was hard for her to believe me that everything has changed, you can find ATM in Moscow probably more often then in LA and amount of food in supermarkets the same as in LA and the quality of food is better (IMO). Max the same guy. He remembers how it was 20 years ago, and he don’t want to see a NEW RUSSIA. USA has only 3 hundreds years of history as a country. Russia has 15 hundreds and if we are talking about history of Slavonic nationality it’s many thousands years of history and a culture. I will give you an analogy – compare NY in 1930x and 200x. The difference is the same between Russia 20 years ago and now.

Yes, in Russia there is a big problem with corruption, yes in Russia is not very high standard of living(medicine, education), but trust me we know how bad it can be… in the 90’s when USA was friends with Russia, we had much worse and I don’t understand why immigrants who left Russia many years ago don’t like Putin… about IT startups, I worked in several quite successful, I do not think that everything is so bad, otherwise why investors to invest money

The data I’m aware of says Soviet Russia had more scientific research and more educational spending per capita than we did. And the anecdotal evidence I have, from people who grew up and were educated there or from people who visited there in the decade following the fall of the Soviet Union, was that the Soviet educational system was excellent. Your testimony is an outlier.

It was hard for her to believe me that everything has changed, you can find ATM in Moscow probably more often then in LA and amount of food in supermarkets the same as in LA and the quality of food is better (IMO).

If true, and if widely accessible to a good sized plurality, let along a majority, of Russians, that would be quite sufficient to sustain Putin in power, no matter what else he does. That’s how politics works, sort of like, if the economy tanks during an election year, the party in power loses election, no matter what the real chain of causation.

Machiavelli and Oligarchic Democracy
They’re more concerned about whether government and the political system is fair or stacked against them. And on those grounds, there are good reasons to think the difference between the U.S. and developing countries isn’t very big at all.

How people answer questions about the corruption of political parties or legislatures is more closely related to how they answer the question, “To what extent is this country’s government run by a few big entities acting in their own best interests?” Rather than defining corruption narrowly around the question of whether bureaucrats ask for a speed payment to cut through red tape, most people conceive of corruption as elites using the power of government to their own advantage.